B60/100FDD 2026
SpringHill Suites by Marriott — Litigation & Risk
Lodging - Hotels & Motels · FDD Items 3, 4 & 5
Elevated Risk
21 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
21
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
60 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
8
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$38.8M
Avg loan size
$4.9M
Participating lenders
6
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 60/100 rating
Risk Score Breakdown
- 01MEDNo disclosed average unit revenue or net income (Item 19) prevents ROI validation on $13.2M–$38.6M investment
- 02HIGHExtensive litigation exposure: 2018 data breach class actions, fee disclosure investigations, antitrust allegations on pricing/data sharing, and multiple franchisee disputes create legal and reputational risk
- 03MINORUnprotected territory with 579 competing units (8.4% YoY growth) creates cannibalization risk—no guarantee of exclusivity
- 04MEDHigh-end capital requirement ($13.2M–$38.6M) combined with 5.5% royalty on undisclosed revenue creates uncertainty on payback period and cash flow
- 05HIGHGoing Concern: False status, while not critical, suggests Marriott's internal reporting flagged material uncertainty about SpringHill's viability
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.